Bank stocks fall amid fears of new bonus tax

Bank stocks fell today amid fears that the UK could impose further heavy taxes on the banks in next week's Budget. While the opposition called for a new £2bn levy on bankers' bonuses, the government suggested it was unlikely to repeat the bank bonus tax in next Wednesday's budget speech.

Investors lost a little faith in the banks regardless. HSBC was down 1.2%, or by 8p, to 650p. Barclays fell 1.4%, or 4.2p, to reach 295p. Royal Bank of Scotland was down 1p to 42p. and Lloyds Banking Group was down 0.6p to 60.6p.

The FTSE 100 today moved away from the trend of the last few months, in which its daily movement has been largely determined by the mining stocks.

Apart from the banks, which took 8 points off the FTSE 100 as a whole, and a fall in Vodafone, the falls were evenly spread, as the index finished 53 points lower at 5,775. Only 16 stocks ended in positive territory, with 84 down and two unchanged.

Shares in Vodafone fell after reports that it would get less than expected for its stake in SFR. Joint venture partner Vivendi is apparently not prepared to pay more than £6bn for the minority stake, with the market hoping for a figure closer to £7bn. The shares fell 2.2%, or by 4p, to finish at 175p.

Carnival was falling again after disclosing late on Friday the impact of surging fuel prices on its profits. The cruise ship operator's shares were down almost 2%, by 51p, to reach £25.49.

Dixons Retail was a faller as Nomura suggested "brown goods" might be particularly badly hit by retail weakness. The shares were down 3.8% after the broker said that the general problems in retail would affect Dixons in particular. While the sale of white goods was holding up because of a need to replace them regularly, "brown goods appear generally to be promotional-led, with consumers focusing on essential purchases only, and also iPads/tablets," Nomura said. It downgraded the stock to neutral, moving its target price to 22p. The shares fell 0.66p to 16.5.

Fellow retailer JD Sports lost ground today too, after walking away from talks with struggling JJB on Friday. The shares were 4.7% down, by 44p to 887p.

Bovis Homes delivered a boost to UK housebuilding, resuming its payment of dividends. Richard Curr at Prime Markets said that the resumption of the dividend moved talk of a recovery from "tentative" to "solid". Experts warned that the government's localism policy and other threats to economic growth were still a concern for the sector, but Bovis nevertheless ended the day 13p better at 443p, up 3%.